By all accounts Chavez himself was startled to have been made CFO. In an interview last year, he described his surprise at being chosen for the role by Lloyd Blankfein. In subsequent interviews, he said the CFO role involved the "steepest learning curve" he'd ever encountered, but that his history as a "strat" and data-guy brought a different dimension to the job. "We’re able to get much better actionable insights that make the firm a less risky business because we’re able to go much further out into the future,” he told the New York Times. Chavez' execution of the CFO role was to be underpinned by objectivity derived from data.

Unfortunately, circumstances were against him. Chavez' ascension to CFO was marked by an historic slump in revenues from the firm's securities business. The rot began in 2016 and continued throughout last year. It wasn't Chavez' fault, but many in securities weren't happy with the way the neophyte CFO fielded questions about their enfeeblement. "He was too condescending and evasive," says one senior member of Goldman's securities business. The Wall Street Journal blamed Chavez for the unimpressive performance of Goldman's shares, which remained flat over the past 12 months while the KBW Nasdaq index rose 14%. Chavez was too vague, claimed the Journal; he mismanaged the ending of Goldman's share buy-backs.

And yet, Chavez was messenger rather than protagonist. Goldman's declining share price might equally be attributed to analysts' concerns about the long term viability of the firm's plan to add new clients and to build a flow trading presence at a time when other banks with better corporate client penetration and more established electronic trading systems are doing the same. As analysts from KBW pointed out after Goldman's second quarter results in July, Goldman's share repurchase scheme was stopped precisely so that the firm could devote more capital to servicing clients' demand for its balance sheet. - In other words, to give a boost to the sales and trading business. In the circumstances, KBW's analysts were worried that sales and trading revenues hadn't increased by as much as expected. This was their concern - not Chavez' decision to halt buybacks per se, or the way in which this was communicated. In fact, far from deprecating Chavez' abilities as CFO, KBW's analysts praised him for offering, "improved disclosure and commentary."

Unfortunately for Chavez, he seems to have had few influential friends - save Blankfein. Salespeople and traders at the firm took affront to Chavez' intimation that their jobs could be automated away by algorithms. Not everyone was convinced of his strategy. "Marty’s view that most roles can be automated may be true 10 years forward but it is antithetical to what the securities division needs to do today," says another senior Goldmanite. "These are not traits that engender client confidence when we're trying to prioritize relationship-building."

Stephen Scherr, Solomon's choice as Chavez' replacement is a much more pedestrian choice as CFO. Scherr led Goldman's Latin American business but is not Latino (unlike Chavez). He's not gay (unlike Chavez). He does not have Japanese tattoos up his arms (unlike Chavez). He is not a reformed alcoholic, He was not summoned to Goldman Sachs by a voice from God. He does not have a sobriety dog. He is not a compulsive sharer. At no point has Scherr suggested that Goldman's compensation for individual employees should be made visible internally.

In this sense, Chavez' demotion can also be read as a cultural signal. Solomon is pro-diversity, but his reading of diversity focuses heavily on equal opportunities for women. Chavez' version of diversity is more gay, tattooed and counter-cultural.

Needless to say, Chavez hasn't actually left Goldman. He will still be co-head of the securities division with Ashok Varadhan and Jim Esposito. "As demotions go, it's a pretty good one," reflects a Goldman MD. There's potential for a clash between Chavez and 'Espo' - given that one man is all about automation and the other is an exponent of human interaction. However, Goldman insiders are positive about the change. "Chavez is the number one candidate to drive the digitalisation of the securities business, so he's now in his natural seat," says one. "As co-head of securities, he should complement Ashok who's a FICC trader and Jim, who's a salesman and is close to the investment banking division.

"It all looks very solid - I wouldn't be surprised to see this set-up enduring for years."

Bear with us if you leave a comment at the bottom of this article: all our comments are moderated by human beings. Sometimes these humans might be asleep, or away from their desks, so it may take a while for your comment to appear. Eventually it will – unless it’s offensive or libelous (in which case it won’t.)